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Saturday, April 21, 2012

Law Firm Hit With $45 Million Malpractice Suit

Businesses Hit Firm With $45 Million Malpractice Suit 
The New York Law Journal by Christine Simmons  -  April 23, 2012

Six business owners are suing Morrison Cohen and one of its partners for $45 million in damages, claiming in a malpractice suit that they overlooked critical language in a transaction. The plaintiffs suing Morrison Cohen and Brian Snarr, chair of the firm's compensation, benefits and employment department, are small to mid-sized business owners who sold shares of their businesses through employee stock ownership plan transactions, according to the lawsuit filed last week in Manhattan Supreme Court. Read the complaint. The plaintiffs sought to defer capital gains and capital gains taxes on the sales by reinvesting the proceeds in U.S. corporate bonds. The bonds were insured against default by certain financial guaranty insurers. Morrison Cohen represented and advised the plaintiffs during the transaction, the suit says. Shortly before the closing of the transaction, the language in related documents was altered, creating a new default event tied to the ratings of the polices issued to insure the bonds, not simply the bonds themselves, according to the suit. The change in the documents "created a fundamental risk" in the reinvestment transaction that the plaintiffs didn't agree to and the law firm should not have allowed it to be inserted, the suit said. David Rose, a partner at Pryor Cashman who represents the plaintiffs, declined to comment. Morrison Cohen managing partner David Scherl said his firm will not comment on pending litigation "other than to confirm that we will vigorously defend against the claims made."

CLICK HERE TO READ THE COMPLAINT

6 comments:

Anonymous said...

Cat fight and a lot of legal fees. In the end, the non-lawyer will lose everything.

thu said...
This comment has been removed by a blog administrator.
Anonymous said...

This is just another scam by a bunch of greedy lawyers. Big money will be paid out by the insurance companies. Everyone loses except the lawyers, including the insurance companies. That's the rule.

Anonymous said...

Did you think your lawyer works for you? Did you trust your lawyer? Do you think the lawyer suing the other lawyers is any different? Wanna buy a bridge with guaranteed toll revenue?

Anonymous said...

Dont you just love it when low life scum attorneys fight! It kind of gives you some faith in the corrupt system!

Anonymous said...

It is all part of their scam. Like a skit. All planned in advance. No fiduciary.

Blog Archive

See Video of Senator John L. Sampson's 1st Hearing on Court 'Ethics' Corruption

The first hearing, held in Albany on June 8, 2009 hearing is on two videos:


               Video of 1st Hearing on Court 'Ethics' Corruption
               The June 8, 2009 hearing is on two videos:
         
               CLICK HERE TO SEE Part 1
               CLICK HERE TO SEE Part 2